They may be corporate heavyweights, but times are tough for them too, including their activity on the continent. On 22 February, as its annual results were being published, Nestlé reported on its 2023 performance.

While the Swiss-based food multinational reported “strong organic growth and a solid improvement in margins”, its sales fell by 1.5% to 93bn Swiss francs (approximately $105.8bn).

Mixed results for Nestlé and Danone

“The unprecedented inflation of the last two years has increased pressure on many consumers and affected demand for food and beverages,” said Nestlé CEO Ulf Mark Schneider.

Latin America was the only region where Nestlé saw its sales grow, while the Asia, Oceania and Africa (AOA) zone accentuated the global trend: despite organic growth of 8.3%, its sales fell by 5.2%.

“The Middle East and Africa saw double-digit growth, driven in particular by the affordable offerings of Maggi [cubes, sauces, noodles], NAN [milk for children] and Milo [chocolate drink],” said Nestlé, which has 17 subsidiaries on the continent.

The French group Danone, another champion of the global food industry, which published its results on the same day, fared better. Despite a “context that remains difficult”, its annual sales rose by 7% to almost $30bn (but fell by 0.2% on their published figures), with “free cash flow at a record level of $2.8bn”.

The group, headed by Antoine de Saint-Affrique, owes its good performance to three regions – Latin America, Europe and a third composed of China, North Asia and Oceania – as well as the mineral water sector.

In the region dubbed “Rest of the World”, which includes Africa, sales rose by just 3.5%. This modest performance in relation to the global figure has less to do with the continent – where the group is present in 11 countries – but with “the sustained momentum of specialised nutrition in Asia and the Middle East”.

Unilever refocuses

In early February, another major market player, Unilever, published results that showed it was in trouble. Despite a recovery in sales volumes, the British group reported a fall in sales and net profits for 2023, to $64.7bn (-0.8%) and $7.1bn (-15%) respectively, suffering from the negative impact of exchange and transfer rates.

“Our competitiveness remains disappointing and our overall performance must be improved,” said its new boss, Hein Schumacher, on 8 February. Taking up his post in July 2023, he launched a strategic plan in October which includes a refocusing on 30 “power brands” and investment in marketing and innovation.

Unilever generates most of its sales (44%) in the Asia-Pacific-Africa region, ahead of the Americas (36%) and Europe (20%). On the continent, it continues to face political instability, the impact of exchange rates and pressure on purchasing power. Nevertheless, the group, known for its Knorr, Dove and Magnum brands and present in 20 African countries, is emphasising its resilience.

Mondel?z spared

He also praised the “double-digit growth” recorded in Africa, as well as in Latin America and Turkey, fuelled by the category of “fortified products [with iron and vitamins] which are helping to combat malnutrition in the region”.

At the end of January, the American giant Mondel?z International, headed by Dirk Van de Put, stood out by publishing solid results, with sales of $36bn and a net profit of $4.9bn, up by 14% and 82% respectively.

The group, which markets the Cadbury, Oreo, LU, Toblerone, Côte d’Or and Milka brands, is concentrating its activities in North America and Europe while benefitting from strong growth in its Latin American operations. Unsurprisingly, it has little faith in the Asia, Middle East and Africa region, which recorded the group’s most modest sales growth in 2023 at +4.6%.